PSYC101 Week 6 Tip Sheet Completing the Week 6 Worksheet and .docx

PSYC101 Week 6 Tip Sheet: Completing the Week 6 Worksheet
and Reviewing Grading Feedback
The Week 6 Worksheet guides you through the key elements of
a published scholarly journal article and demonstrating APA
source
citation skills, activities you will engage in frequently as you
complete assignments including essays, research papers and
literature reviews
in future courses.
When completing your worksheet keep in mind:
This assignment is a worksheet, not a paper. You will
be answering a series of questions focusing on particular
components of an assigned, published journal article.
The worksheet and the article required for
completing it are attached as links to the bottom of the
classroom assignment screen. Open each by clicking its link.
Nothing may be deleted from or altered in the original
worksheet Word document.
Although you may not submit it before Week 6 of the
course term, working ahead and pacing completion of the
worksheet is recommended, just as you would do with a
paper based on a scholarly journal article or articles.
You should only source cite in answering the questions
at the end of the worksheet requiring demonstration of APA

source citation skills. There should be no other source
citations in your work.
No quoting or copying is permitted. Only technical
terms and proper nouns from the article may be used as-is
in your worksheet answers. Everything else must be
parahrased (restated in your own words).
Image sources: Microsoft Word and APUS Sakai PSYC101
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Where to Find your Worksheet Grade and Feedback
The score for your worksheet will be displayed in your
gradebook.
Assignment feedback may also be in the gradebook
Instructor Comments box, accessed by clicking the
assignment name under the Category column.
If feedback is too detailed to be placed in the gradebook or
is inserted in a returned copy of your submitted assignment,
you may see a very brief instructor comment such as, “See
the assignment screen for feedback details.”
To view feedback on the assignment screen, click,
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the name of the assignment to see its feedback.
The screen that opens will show instructor grading
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instructor feedback inserted.
Message your instructor if after the grading period

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Students
ext
· Baack, D. (2012). Management communication. San Diego,
CA: Bridgepoint Education,
· This text is a Constellation™ course digital materials (CDM)
title.
· Chapter 7
· Chapter 8
Article
· Wiedmer, T. L. (2010). Workplace bullying: Costly and
preventable. Delta Kappa Gamma Bulletin, 77(2), 35-41.
Retrieved from the ProQuest database
Recommended Resources
Multimedia
· Real Arts Media (Writer &Producer). (2011).Managing
conflict resolution [Video file]. Retrieved from
https://secure.films.com/OnDemandEmbed.aspx?token=42092&
aid=18596&plt=FOD&loid=0&w=560&h=315&fWidth=580&fH
eight=365
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7
Learning Objectives
After reading this chapter and studying the materials, you
should be able to:
1. Relate communication processes to negotiation situations.
2. Apply bargaining principles that lead to successful
negotiation outcomes.
3. Utilize management communication techniques to facilitate
the stages of negotiation.
4. Identify forms of conflict in organizations and the roles
played by communications channels.
5. Employ effective methods of conflict resolution.
Negotiation and Conflict
baa66869_07_c07_223-258.indd 223 4/25/12 11:37 AM
CHAPTER 7Section 7.1 Negotiations and Communication
7.1 Negotiations and Communication
Learning Objective # 1: How is communication intertwined with
negotiation and
bargaining?
Many aspects of organizational life, beginning with applying for
and accepting a job, involve bargaining and negotiation. Many

company activities also involve negotiations, both within the
firm and with other organizations. Communica-
tion processes play major roles in the successes and failures that
individuals and groups
experience in negotiations and bargaining processes.
The terms bargaining and negotiation have been viewed from
two perspectives. One sees
them as being the same (Wall, 1985; Robbins, 2005, p. 434).
The other suggests that nego-
tiation refers to “win-win” situations in which the ultimate
objective will be finding mutu-
ally acceptable solutions to complex conflicts. Bargaining, in
that context, represents a
competitive “win-lose” circumstance in which both parties seek
to obtain the best possible
outcome for their side (Lewicki, Barry, & Saunders, 2010, p. 3).
This chapter uses the first
approach, treating the terms interchangeably. In that context,
negotiation is a give-and-
take decision-making process involving interdependent parties
with differing objectives
or outcome preferences (Bazerman & Neale, 1992).
Two types of negotiations take place in employment settings
(Walton & McKersie, 1965).
When a single issue is involved, and a zero-sum game exists in
which one’s side gain or
advantage becomes the other side’s loss or disadvantage, it is a
distributive negotiation.
An automobile manufacturer negotiating the price for batteries
to be placed in its cars
provides an example of a distributive negotiation. Every dollar
that the car manufacturer
has to pay for batteries becomes a dollar of revenue to the
battery supplier.

The second circumstance, in which a win-win solution can be
found, is an integrative
negotiation. This involves a problem-solving agenda in which
two or more sides try to
obtain a settlement that benefits both. Integrative negotiations
occur when a company
forms a partnership with a charity to stage a fund-raising event.
They also take place
when two firms form a joint venture to create a product.
Integrative solutions succeed
when the two sides can establish a mutual goal.
Table 7.1 shows forms of negotiations present in the business
community. Individual
negotiations, company-to-company negotiations, and company
negotiations with outside
agencies or organizations constitute the primary categories.
Both distributive and integra-
tive negotiations take place in those areas.
Table 7.1: Types of negotiations
Individual With Company Company to Company Company With
Outside Group
Employment Contract Sales Unions
Wages Collaborations Special Interests
Benefits Government
Job Status
baa66869_07_c07_223-258.indd 224 4/25/12 11:37 AM

These negotiation situations require various forms of business
and managerial
communications.
For Review
Define negotiation, distributive negotiation, and integrative
negotiation.
The Writers Guild: Negotiation and Conflict
Every three years, the Writers Guild of America, East
and the Writers Guild of America, West meet to con-
fer with the Alliance of Motion Picture and Television
Producers (AMPTP) to negotiate a contract for com-
pensation for various writing activities. In a previous
bargaining session and contract enactment, the writers
had agreed to a minimal amount of compensation for
revenues earned from sales of movies and other mate-
rials on VHS videotapes. As the popularity of home
videos exploded, many in the guilds felt shortchanged
by the amount of compensation. In 2007, the bargain-
ing team for the writers was resolute about receiving
payments for sales of DVD and other digital content,
especially because it would soon be possible to watch
programming on a cell phone and other remote receiv-
ers at any time via computers and the Internet.
As contract talks continued and the deadline for expiration of
the contract between the AMPTP and
the guilds approached, the producers took a hard stance and
removed residual payments for DVD

sales from their offer. On October 20, 2007, the guilds voted to
strike if an acceptable arrangement
could not be reached (Finke, 2007).
After engaging in these lengthy negotiations, the guilds went on
strike over compensation during the
2007–2008 television season. Estimates of revenue loss from
the strike range from $300 million at the
low end to $2.1 billion at the top (New York Times, 2008).
Numerous stakeholders beyond the producers and writers were
involved. Late-night television pro-
gramming, such as The Tonight Show with Jay Leno, The Daily
Show with Jon Stewart, and the Late
Show with David Letterman first broadcast re-runs of programs,
hoping for a quick end to the strike.
The Late Show, owned by a separate production company, was
able to negotiate an “interim” contract
returning its writers to work after two months. Soon after, Leno
and Stewart received criticism for
crossing picket lines and continuing their programs without the
use of writers. Both argued that doing
so helped keep other program employees from enduring greater
financial hardships. Meanwhile, tele-
vision production of various series on all major networks (NBC,
ABC, CBS, and FOX) also came to a halt
as new scripts ran out. Daytime drama programs also were
affected.
In addition, the groups affected included information, leisure,
and hospitality; professional and busi-
ness services; trade, transportation, and utilities; financial
activities; and education and health services
(Milken Institute, 2008). Also, other unions, such as the Screen
Actor’s Guild and Teamsters had vested
interests in the negotiations.

© HECTOR MATA/Reuters/Corbis
The Writers Guild negotiation took
place over several months and included
a work stoppage.
(continued)
baa66869_07_c07_223-258.indd 225 4/25/12 11:37 AM
Individual Negotiations
As Table 7.1 notes, individual employees negotiate with
companies for a variety of out-
comes. Often individual negotiations begin with how much a
person is to be paid, includ-
ing a signing bonus in some circumstances. Other issues are
benefit packages that contain
profit-sharing plans, retirement plans, health insurance,
vacation time, sick leave, and
other elements. Job status is another potentially negotiable issue
and defines where the
person will be placed in an organizational hierarchy, including
responsibilities and levels
of authority. These discussions continue throughout a person’s
career. Initially, factors that
influence negotiations for pay and benefits are (Brophy, 2004):
• the strength of the job market
• the company’s compensation policies
• the company’s financial health
• the applicant’s bargaining position, including

offers from othercompanies;
personal accomplishments, including degrees and awards; and
success in previ-
ous jobs
Individual negotiations consist of face-to-face interactions,
exchanges of letters and emails,
telephone conversations, and, in some instances, a formal
written contract specifying all
the elements of an agreement. The two parties involved are the
employee and one or more
management representatives.
The majority of individual negotiations for pay and benefits
take place during the final
stages of the hiring process. Normally, the management
representative will be the first
to ask about expected salary and other conditions of
employment. When the question
is posed during the employment interview, before the person has
been selected for the
position, the candidate should answer in a way that will not hurt
his or her chances of
obtaining the position. Advisable responses are that you are
“open” or looking for a
“competitive offer.” Once the position has been offered, then
more-concrete negotiations
begin (Bovee & Thill, 2012). During the course of a career,
additional negotiations takes
place regarding pay raises, job assignments, and even when and
how a person will retire
(phased versus full).
In February 2008, the two sides reached an agreement. The
writers quickly ratified the contract, and

soon all were back to work. The economic impact continued for
the remainder of the year, in the
entertainment industry and also in Southern California and New
York City.
Questions for Students
1. How was the writers’ strike both a negotiation and a conflict?
2. What role would public relations play in these negotiations?
3. What ethical issues did Jay Leno and Jon Stewart encounter
as part of the strike?
The Writers Guild: Negotiation and Conflict (continued)
baa66869_07_c07_223-258.indd 226 4/25/12 11:37 AM
Company to Company
Two of the more common company-to-company negotiation
issues concern a sale or a
partnership. A sales transaction specifies the price, terms of
delivery, procedures for han-
dling defects and returns, and the manner in which any disputes
will be resolved, includ-
ing the state in which all legal matters, such as contract
interpretation, would be resolved.
Sales negotiations occur in a variety of ways, including through
conversations at trade
shows, visits to a company by a sales representative, social
encounters such as lunches and
golfing events, and telephone conversations. Others transpire

via mail, email, and through
formal offers and contracts. The level of trust between the
companies often dictates the man-
ner in which bargaining will take place, including the
communication venues to be used.
Companies form many types of partnerships. Examples are
corporate sponsorships of
various events and charities, cooperative advertising programs,
and agreements to co-
produce goods and services. Each involves a series of
negotiation sessions to finalize all
arrangements. Often more than two parties are included. For
example, Interstate Batteries
maintains a relationship with NASCAR that features
cooperative advertising and expense
sharing with M&M’s. Community events, such as a Fourth of
July fireworks display, may
involve numerous partners.
Negotiations to develop partnerships use the same
communication venues as those avail-
able for making sales. Informal talks can often lead to formal
negotiations to establish a
relationship. Effective bargaining during these sessions can
create benefits for both parties
without any need for adversarial tactics. Negotiations can occur
at any time during these
relationships.
Company With Outside Groups
Managers often negotiate with outside groups that have interests
in a firm’s operations. A
union is an example of an outside group. Every company that
has employees represented

by a union will engage in negotiations. Contract bargaining can
occur annually, or firms
can reach multiyear agreements with unions regarding wages,
hours, and conditions of
employment. Strict governmental regulations are in place to
ensure that such negotiations
proceed in as orderly a manner as possible.
Company representatives also may negotiate with governmental
officials to obtain vari-
ous contracts. These sales agreements, while highly regulated,
can include bargaining
sessions. Other negotiations with governmental agencies
involve interpretations of regu-
lations and mediation sessions when conflicts with other
companies arise. Many such
negotiations have occurred regarding federal pollution standards
and company practices.
In certain circumstances, company leaders find it necessary to
negotiate with members of
special-interest groups. People for the Ethical Treatment of
Animals (PETA) has engaged
in sessions with members of profit-seeking companies regarding
methods of killing and
cooking chickens, the use of dogs and other animals in
developing and testing cosmet-
ics, and humane treatment of animals in film-making, and with
rodeo organizers. Other
organizations have challenged how companies portray ethnic
groups in advertising.
baa66869_07_c07_223-258.indd 227 4/25/12 11:37 AM

CHAPTER 7Section 7.2 Negotiation Processes
Environmental groups, as well
as government agencies, engage
in negotiations over the ways
in which companies dispose of
waste and use energy.
Communication venues are es-
tablished for negotiations in each
of these company-to-outsider
group interactions. These bar-
gaining sessions often include
sets of individuals, such as the
bargaining team for labor and a
separate team representing man-
agement in a union-management
negotiation. The two sides often
face each other across a bargain-
ing table, creating a formal, per-
haps adversarial, tone. Negotia-
tions with governmental officials and special-interest groups
range from informal, personal
meetings to mediated sessions and courtroom encounters.
7.2 Negotiation Processes
Learning Objective # 2: What steps and activities are involved
in completing successful
negotiations?
Effective bargaining begins with understanding how the process
will work. Manage-rial negotiations with future and ongoing
employees differ in format from those involving other
companies or outside agencies. However, many of the activities

are
largely the same, including understanding the preconditions to
negotiation, the stages
involved, and the proper tactics to employ.
Preconditions to Negotiation
Before any bargaining process begins, managers should believe
negotiation represents the
best option. Table 7.2 identifies times when it is better to find
some other approach. After
considering these precautions, the preconditions to bargaining
may be examined. Three
preconditions are an understanding of the bargaining
environment, the availability of
bargaining resources, and the characteristics of the bargaining
issue.
For Review
What three types of negotiations take place in the business
community?
Digital Vision/Thinkstock
Environmental groups, as well as government agencies, engage
in negotiations over the ways in which companies dispose of
waste and use energy.
baa66869_07_c07_223-258.indd 228 4/25/12 11:37 AM
Table 7.2: When negotiation is NOT an option

The other side Acts in bad faith (does not follow legal
protocols)
Makes unethical demands
Your side Is not well prepared
Could simply wait and improve its position
Does not have time to negotiate
Might lose everything
Will gain little or nothing
Sources: Lewicki, R. J., Barry, B., & Saunders, D. M. (2010).
Negotiation (6th ed.). New York,
NY: McGraw-Hill, p. 7. Levinson, J. C., Smith, M. S. A., &
Wilson, O. R. (1999). Guerrilla
negotiating: Unconventional weapons and tactics to get what
you want. New York, NY: John
Wiley & Sons, pp. 22–23.
The Bargaining Environment
Negotiation can take place only in the proper climate. When
such a frame of mind does
not emerge, negotiations become more likely to fail. The most
important psychological
elements are (Moore, 2011):
• identification of the participants
• readiness to negotiate
• willingness to agree on someissues
• willingness to settle
Managers should be aware of
the various stakeholders and
participants present, prior to
any bargaining process. In the
case of negotiations with out-
side agencies, for example, a

company may seek to reach an
agreement with a union, while
remaining aware of governmen-
tal constraints, such as those
related to bargaining in good
faith, equal-opportunity legisla-
tion, and antitrust laws.
A stakeholder group consists
of people with a vested interest
in the outcome of a negotiation,
as Chapter 1 describes. These
individuals should tangibly
demonstrate their readiness to be seated at the bargaining table.
An individual or group
conveys the readiness to negotiate by committing to conduct the
needed investigation
before any first meeting. A stakeholder should have adequate
time to prepare a negotia-
tion strategy. Before beginning any actual negotiation, all sides
should be able to say,
“We’re ready.”
Stockbyte/Thinkstock
Before beginning any actual negotiation, all sides should be
able
to say, “We’re ready.”
baa66869_07_c07_223-258.indd 229 4/25/12 11:37 AM
Negotiation will not be possible unless some agreement on
issues and interests exists. For

example, an applicant should be able to agree with company
leaders that hiring him or
her at a given rate of pay and benefits will benefit the applicant
and the company. Two
companies should be able to agree that the sale of a product
benefits both organizations.
The parties to a negotiation should be able to commit to a joint
decision-making process
based on such agreements (Kolb & Williams, 2003).
Negotiations succeed when participants want to settle. A
negotiation will be doomed to
failure if continuing a conflict takes on more importance than
settling. In essence, for an
agreement to be reached, the disadvantage created by failing to
find an agreement must
be more significant than keeping the conflict going.
The Availability of Bargaining Resources
Participants in a negotiation should have access to sufficient
time and money to fully
engage in a dialog. Additional bargaining resources include
bargaining skills held by
key negotiators. When one side’s resources are inadequate or
unequal to the other side’s
resources, this may impede effective negotiations and lead to
greater disparity in the final
outcome of the negotiation, producing win-lose results. The
resources held by a group in
a negotiation include a “means of influence” form of leverage,
as Table 7.3 shows (French
& Raven, 1959).
Table 7.3: Sources of influence in negotiations
Legitimate Superior position based on a governmental dictate

Ownership of a patent or similar protection
Contractual advantage from a previous negotiation
Individual with a specific degree or status (e.g., CPA, JD)
Reward Access to additional business partners or customers
Establishing a basis for future agreements
Company’s ability to pay and grant benefits to individuals or
companies
Coercion Loss of revenues
Loss of supplies
Damaged relations with customers
Damaged relations with governmental organizations
Individual’s ability to seek employment elsewhere
Company’s ability to terminate or not hire an individual
Expertise Presentation of factual evidence
Analysis by experts in the area or field
Individual with credentials that make him or her unique
Charisma Personal persuasiveness
Thought-provoking questions and discussion

baa66869_07_c07_223-258.indd 230 4/25/12 11:37 AM
Characteristics of the Bargaining Issue
The bargaining issue itself presents a potential roadblock to or
opportunity to bargain. To
become a viable bargaining issue, various characteristics of that
issue must be in place.
Among these are interdependence, the willingness to
compromise, unpredictability of the
outcome, negotiable issues, and participants holding the
authority to decide.
Interdependence forms when an attachment of some kind
between the parties exists. An
applicant bargaining for salary has the knowledge or a skill that
the organization needs,
which creates the interdependence as part of the job
search/employment offer process.
Parties to a sale, such as a situation in which one company
seeks to provide a service to
another company, should in some way cause both sides to rely
on each other in order to
have their needs met or interests satisfied. When one party to a
bargaining arrangement
finds that it can satisfy its needs without the help or cooperation
of the other, no real rea-
son to negotiate exists.
In many negotiations, compromise may be necessary for the
parties to reach an agree-
ment. If one side determines that the other has “dug in” and no
compromise will be pos-

sible, negotiation might not be the best option.
Parties negotiate when the out-
come of an issue cannot be pre-
dicted. If one company knows
that a lawsuit against another
company only has a 50–50
chance of success, the firm’s
management team may decide
that its best interests are served
by negotiating instead. The rea-
son for the decision would be
that, by negotiating, the com-
pany would receive at least some
of what it wants; a court order
could completely favor the other
side. The same holds true when
an individual considers walking
away from a job offer, rather than
taking a lower salary or reduced
benefits (Schalzki, 1981).
Negotiators must believe that
acceptable settlement options can be discovered. Room for give-
and-take must be present.
When only win-lose settlement possibilities are apparent, the
parties involved become
more reluctant to enter into dialog.
In any negotiation, the participants involved must have the
authority to make a decision,
whether it is a hiring decision, sales agreement, or resolution
with an outside agency.
When they do not, or when a ratification process has not been
established, negotiations
will normally be limited to an information exchange between

the parties (Lewicki & Hiam,
2006, pp. 40–73).
Photodisc/Thinkstock
If one company knows that a lawsuit against another company
only
has a 50–50 chance of success, the firm’s management team
may
decide that its best interests are served by negotiating instead.
baa66869_07_c07_223-258.indd 231 4/25/12 11:37 AM
CHAPTER 7Section 7.3 The Stages of Negotiation
7.3 The Stages of Negotiation
Learning Objective # 3: How can management communication
techniques facilitate the
stages of negotiation?
When two parties decide that negotiation represents the best
option for settling an issue, the various states of negotiation can
begin. Achieving results comes from careful management of the
entire process. At the most general level, nego-
tiation consists of three overall stages, the preliminary,
bargaining, and ending phases.
Each involves various activities. Table 7.4 presents elements of
a three-stage model of
negotiation.
Table 7.4: The stages of negotiation
Preliminary Stage Bargaining Stage Ending Stage

Prepare Framing Close
Open Discovery Follow-up
Consensus
Packaging
Preliminary Stage
In the preliminary stage, two primary activities receive
attention: preparation and open-
ing. When managers plan thoroughly, the chances for achieving
desired bargaining goals
increase. The failure to plan provides the other party with a
bargaining advantage that
continues through the remainder of the process.
Preparation
Preparation begins at the point when management decides
negotiations should go for-
ward. Several principles guide preparations. Managers should
identify and evaluate the
receiver, sender, and purpose of the negotiation (Hynes, 2011,
p. 245).
For Review
What three preconditions to negotiations should be examined to
decide if bargaining should take
place?
For Review
What are the three main stages of the negotiation process?

baa66869_07_c07_223-258.indd 232 4/25/12 11:37 AM
The receiver analysis involves discovering the type of person
(and company) who will
be sitting across the table. Some will be quiet and reserved;
others will be bombastic and
aggressive. Cultural differences can dictate negotiation styles in
various regions of the
country and in international settings. These include the degree
of deference, eye contact,
gift-giving, and silent pauses.
Analysis of the sender involves establishing the style that your
side will use. Exuding confi-
dence constitutes a primary advantage in negotiation. Remember
that body language com-
municates a great deal during a negotiation. When a negotiator
rolls up his sleeves, removes
his jacket, and pours a cup of coffee, the message conveyed is
that he expects a long session.
Nervous finger-tapping or twirling a pencil suggests a level of
nervousness and lack of
confidence (Ilich, 1983). Table 7.5 lists various styles and
strategies related to negotiation.
Table 7.5: Negotiation styles
Surprise Quick new request; quick concession
Bluff Withhold information; act as though you have a stronger
position than you do

Fait Accompli Bluffing that an agreement has already been
reached that favors your side
Stacking Combine your idea, demand, or proposal with a
reference to a similar situation
Screen Use a third party to negotiate
Take No Prisoners Try to dominate the other side by suggesting
and leveraging a major power differential
Take It or Leave It A final offer; should only be used once
Source: Lewicki, R. J., & Littere, J. A. (1985). Negotiation.
Homewood, IL: Richard D. Irwin.
Analysis of the purpose involves looking at what each side
intends to achieve during the
negotiation. A new employee seeks to reach the best wage and
benefit deal. Most of the
time, employees are able to discover pay levels of co-workers,
even when the company
tries to maintain a closed pay policy. As a result, management
may wish to keep the com-
pensation level at a point where ongoing employees are not
upset when they learn of the
pay package. Bargaining during a sales call involves not only
one transaction but also the
potential for an ongoing relationship.
Also as part of the preparation process, two concepts take
precedence. Negotiators need
to know the maximum supportable outcome, which is the
absolute most a side can ask
for as an opening position, within reason. Second, the lowest
supportable outcome con-

stitutes the least amount or least favorable position a side will
accept from a negotiation.
Table 7.6 displays the interactions of these two concepts, which
create the settlement range
or bargaining zone.
Table 7.6: Maximum and lowest supportable outcome
Salesperson - Company 1 Purchasing Officer - Company 2
Maximum Supportable Outcome $1.5 million Lowest
Supportable Outcome
Lowest Supportable Outcome $1.35 million Maximum
Supportable Outcome
Settlement range or bargaining zone = $1.35 to $1.5 million
baa66869_07_c07_223-258.indd 233 4/25/12 11:37 AM
Closely related to the lowest supportable outcome is BATNA, or
the best alternative to a
negotiated agreement. It identifies the lowest acceptable value
to a party as a substitute to
a stalemate (Bazerman & Neale, 1992, pp. 67–68). BATNA
allows the person bargaining to
know when an offer is higher than one that would lead to an
impasse, because it is above
that “floor” level.
For example, in the sales situation presented in Table 7.6, the
representative of the selling

company knows that $1.35 million constitutes the lowest
supportable outcome, because
it covers the company’s shipping costs to send the items to
another country. If Company
2’s final offer is $1.3 million, the negotiator for Company 1 can
walk away, knowing that
a domestic firm will pay $1.28 million for the items and that the
company will not incur
the same shipping costs. The domestic company offers the best
alternative to a negoti-
ated agreement with the foreign customer (Fisher, Ury, &
Patton, 1992). A negotiator will
often try to discover the BATNA
of the opposing side, in order to
further expedite negotiations.
Preparation includes establish-
ing long-term goals such as
trust and confidence in the other
party. Mutual principles and
concerns begin with whether the
relationship will be adversarial
or cooperative. One of the more
destructive forces in the process
takes place when the urge to win
overwhelms rational thinking
(Malhotra & Murningham, 2008).
Preparation involves selecting
approaches or procedures that
lead to problem-solving when-
ever possible.
Opening
The opening begins when parties make initial contact in person,
by telephone, by mail, or
online. In this stage, negotiators seek to build rapport and try to

establish a cordial rela-
tionship. Most negotiations begin with casual conversations
about non-bargaining issues.
Cultural and particular industry forces often impact and
determine the length of these
initial interactions.
At the beginning of a bargaining session, negotiators express
the desire to reach an
agreeable outcome. Announcing that your side is committed to
following through the
For Review
Define maximum supportable outcome, lowest supportable
outcome, and BATNA.
iStockphoto/Thinkstock
A negotiator will often try to discover the BATNA of the
opposing
side in order to further expedite negotiations.
baa66869_07_c07_223-258.indd 234 4/25/12 11:37 AM
established procedures creates a more professional tone. Both
sides should fully under-
stand the processes that will be used (Moore, 2011). A standard
opening includes the steps
in Table 7.7.
Table 7.7: Opening negotiation procedures

Introduce the parties involved.
Parties make statements demonstrating the willingness to listen,
share ideas, remain open to reason,
and seek to bargain in good faith.
Establish guidelines for behavior.
State mutual expectations for the negotiations.
Describe history of problem and explain why there is a need for
change or agreement.
Identify interests and/or positions.
Define issues and set an agenda.
Source: R. J. Lewicki, B. Barry, & D. M. Saunders (2010).
Negotiation (6th ed.). New York, NY: McGraw-Hill, 41–70.
A negotiator should also understand that “no” may be the
opening position or that the
first offer made by the other side will often be above
expectations. The bargainer or team
should be wary of a “reluctant buyer or seller” ploy that
involves deliberate stalling and
transmitting the unwillingness to reach a quick agreement. A
negotiator should be ready
to respond to such tactics and any other complications.
Developing methods to handle
strong emotions is part of preparation for the opening (Shell,
1999). Tactics include sug-
gesting a “time out,” or cooling off period, using humor to
diffuse the situation, or bring-
ing in a third party to calm both sides, individually or
collectively.

The Bargaining Stage
The bargaining stage includes the processes of framing,
discovery, consensus, and pack-
aging, as Table 7.4 notes. When negotiations are fully under
way, one common approach
involves starting with an issue in which there will be a strong
impact on all participants,
only minor disagreements are present, and a strong likelihood of
agreement exists. Then,
each party explains how it views the situation. At this point, the
session will be more
effective if someone encourages participants to express their
sides in sufficient detail to
ensure that all involved understand the individual’s or group’s
viewpoint. Each partici-
pant should have a chance to describe how he or she views the
situation.
Effective negotiators engage in active listening, ask open-ended
questions, and focus on
collecting information, while asking questions that clarify the
message and encourage the
speaker with support and positive feedback (Brooks, 2003).
When answering questions,
For Review
Briefly describe the two activities that take place in the
preliminary state of negotiation.
baa66869_07_c07_223-258.indd 235 4/25/12 11:37 AM

follow two key guidelines. First, never answer until the question
is fully understood. Sec-
ond, take time to think through your answer. Table 7.8 indicates
methods of response to
bargaining questions.
Table 7.8: Responding to questions during negotiations
Method of Response Purpose
Complete and forthright answers To move forward to the next
issue
Partial answer Tactfully avoid revealing damaging information
Clarify the question Then, answer the part that best serves your
interests
Answer a different question To gain an advantage by what you
say
Create a positive response Turn a disadvantage into an
advantage
Sources: Putnam, L. L., & Poole, M. S. (1987). Conflict and
negotiation, in Jablin, F., Putnam, L., Roberts, K., & Porter, L.
(eds.)
Handbook of organizational communication. Los Angeles, CA:
Sage Publications. Byrnes, J. F. (1987). Ten guidelines for
effective
negotiation. Business Horizons, May–June, 7–12.
Framing
A bargaining session moves more efficiently when both parties

begin by identifying specific
items to be discussed. A frame is a subjective mechanism
through which negotiators can
make sense of situations, leading them to pursue or avoid
subsequent actions (Goffman,
1974; Bateson, 1972). The types of frames used in negotiations
are substantive, outcome,
aspirational, and loss-gain. A substantive frame identifies a
primary point of disagreement.
An outcome frame suggests what a negotiator seeks to achieve
as a result of the process.
An aspirational frame moves from one small issue to a larger set
of interests. A loss-gain
frame defines the risks and rewards associated with various
outcomes (Lewicki, Barry,
& Saunders, 2010). Issues should be framed to be presented in a
nonjudgmental, neutral
manner whenever possible. Beyond starting on an agreeable
note, most negotiations will
bring up issues about which the parties will disagree, creating
the framing process.
As part of the initial process, both sides reveal information that
benefits their arguments
and avoid revealing damaging information. Persuasion
techniques are employed, includ-
ing silence, verifying information, and reconfiguring arguments
to best suit a party’s posi-
tion (Goldman & Rojot, 2003).
When in the framing phase, salespeople use a variety of
techniques. Some attempt to
control the agenda of the sales meeting by ensuring that only
relevant information that
pertains to the potential sale is discussed. Buyers may attempt
to control the agenda as

well. Either party may attempt to slice a deal by tabling issues
on which they cannot
reach agreement and instead focusing on smaller slices of the
deal. They may also attempt
to split the difference when arriving at a final deal. Here, they
would focus on meeting
halfway or somewhere in between the parties’ desired outcome
on subjects such as price,
delivery demands, and other issues pertaining to the final
agreement.
Discovery
During the discovery stage, parties try to generate options for
settlement. Discovery
involves reviewing the needs of parties that relate to disputed
areas and looking for
baa66869_07_c07_223-258.indd 236 4/25/12 11:37 AM
agreements in principle. Negotiators may consider breaking a
major issue into smaller,
more manageable issues and generating solutions for these.
Discovery tactics are (Lewicki,
Barry, & Saunders, 2010, pp. 71–106):
• alternating proposals,allowing each side to “win”
certain elements
• presenting position/counter-position arguments
• making trades or concessions for items of
value
• trying to generate ideasthat benefit both sides

Tradeoffs and compromises are
explored in the discovery phase.
Negotiators avoid any attempt
by the other side to rely on a
“higher authority,” such as, “My
boss won’t go for that offer,” as
a rationale for not meeting vari-
ous negotiation points. Also, the
effective bargainers are aware
of the “vise” tactic, in which
the other side continually uses
phrases such as, “You’ll have to
do better than that,” to put the
squeeze on a bargaining position.
Discovery results in true give-
and-take. As the two parties
defend their areas of greatest interest, they can offer
compromises on other matters. Unless
or until a stalemate occurs, discovery continues.
Consensus
Consensus or a lack of agreement will be signaled in different
ways. A lack of agreement
will be indicated when one side concludes that an impasse has
been reached. To handle
an impasse, three approaches are to offer to set the issue aside
and deal with other issues,
change one of the negotiating points, or bring in a third party to
seek a resolution.
The second type of signal notes that agreeable terms are within
sight. When a negotiator
says something along the lines of, “That sounds like something
we can live with,” the sig-

nal has been sent. When a union negotiator responds, “I think
our members would ratify
that proposal,” a signal of potential consensus and agreement
has been offered.
Packaging
Packaging begins after a signal has been sent that an agreement
is possible. It takes place
when negotiators assess final options for settlement. This
includes a review of the inter-
ests of the parties involved and an analysis of how many
interests can be met by the
offered options. Part of assessing options includes the
evaluation of costs and benefits of
selecting each option.
Hemera/Thinkstock
Discovery involves reviewing the needs of parties that relate to
disputed areas and looking for agreements in principle.
baa66869_07_c07_223-258.indd 237 4/25/12 11:37 AM
At that point, a party can revise bargaining strategies if
necessary. Typically, one side’s
power increases by getting the other side to commit first. To
move toward the final stage
of negotiation, both sides should be willing to note agreement.
One method used to signify that an agreement has been reached
involves writing a letter of
intent. Often these take the form of a memo, rather than a full
letter, and can be sent elec-

tronically. The purpose served will be to make sure no surprises
result later (Byrnes, 1987).
Verbal statements such as “Are we ready to act?” and “Have we
got a deal?” indicate that
the ending stage has been reached.
Ending Stage
The ending stage can begin after the two parties completely
agree to the alternative or set
of alternatives. A sale reaches the ending stage when the terms,
including price, delivery
schedule, financing, and other matters have been finalized. An
agreement between a com-
pany and a union occurs when all issues present in the
bargaining session are resolved.
An individual negotiating for salary and benefits reaches the
ending stage when all ele-
ments of the employment contract have been agreed upon. Two
elements of the ending
stage are the close and the follow-up.
The Close
The parties should establish a
procedural means to formal-
ize the close. A close will take
the form of a written memo
or a legal contract, depending
on the scale and scope of the
agreement. Any written docu-
ment should contain sufficient
detail to implement the agree-
ment and handle any potential
contingencies or complications.
In many situations, monitor-
ing protocols are established to

make sure both sides comply
with the terms of the agreement.
An individual negotiating for a job with a company has reached
the close when a con-
tract or memo spells out the date employment will begin, along
with all of the details
For Review
What four processes take place during the bargaining state of a
negotiation?
Many times, a handshake accompanies a close.
baa66869_07_c07_223-258.indd 238 4/25/12 11:37 AM
of the agreement. A close will often simply be a verbal
commitment by the employer
and applicant, but many such agreements are put in writing,
especially for professional
occupations.
To close a sale, a contract or similar document specifying the
nature of the purchase will
be signed or verbally agreed upon by both parties. Monitoring
in a sales situation includes
updates regarding when orders have been shipped and received.
The contents sent in a
shipment are noted in a bill of lading. A performance bond also
helps guarantee that a

project will be properly completed, as with construction of a
building or facility.
Mergers, joint ventures, and more complex agreements between
companies require a
more-detailed close. Normally, notice of a final agreement or
close occurs when the two
organizations have formally signed legal documents creating the
relationship.
For a union-management agreement to close, the bargaining
contract has been agreed
upon by the negotiators and then a vote by union members will
certify the contract. In a
formal ceremony, negotiators for both sides will sign the final
document. Monitoring of
union-management agreements normally includes specified
procedures for filing griev-
ances regarding contract violations or other matters of
contention or disagreement.
Many times, a handshake accompanies a close. Congratulations
are offered, and both par-
ties can relax and enjoy the accomplishment of completing an
acceptable agreement.
Follow-up
The standard methods used to follow up include emails, phone
calls, letters, and other
interactions. These contacts help reassure the other side that the
agreement is acceptable
and that the terms will be carried out. Then, over time, further
efforts can be made to
continue the relationship through phone calls, email,
videoconferences, mail, and per-
sonal visits.

In summary, effective negotiations take place when both sides
take seriously each aspect
of the three-step process. Careful preparations include analysis
of the receiver, sender,
and the purpose of the negotiation. The bargaining stage plays
out through professional
framing, discovery, consensus, and packaging, relying on
persuasion rather than taking
matters personally. A cordial ending involves a ceremonial
close, along with all necessary
paperwork and efforts to sustain the relationship.
For Review
What two activities are involved in the ending stage of the
negotiation process?
baa66869_07_c07_223-258.indd 239 4/25/12 11:37 AM
CHAPTER 7Section 7.4 Conflict and Management
Communication
7.4 Conflict and Management Communication
Learning Objective # 4: What forms of conflict exist in
organizations, and what roles do
communication channels play in those conflicts?
Interpretations of the term “conflict” have taken several
directions in the past few decades. One early perspective
suggested that conflict constitutes a negative force. Words such
as “violent,” “destructive,” and “angry” portray this point of
view. As time

passed, conflict began to be conceptualized as a continuum from
mild disagreement to
major confrontations, but still with a negative connotation.
More recently, concepts of con-
flict have evolved from considering it as something to be
avoided or eliminated to viewing
conflict as an inevitable, but manageable, process. Some see
conflict as a driving force that
leads to innovation and much-needed change (Fink, 1968; De
Dreu & Van de Vliert, 1997).
For our purposes, conflict will be defined as a circumstance in
which one party negatively
affects or seeks to negatively affect another party in both
observable and perceived ways
(Thomas, 1992; Wall & Callister, 1995). Some forms of conflict
take place even when it
would be difficult to point it out as an observable event. In
others, the manifest strife will
be readily apparent.
Conflict can be compared to another concept, competition,
which is a situation in which all
parties in an event or situation attempt to do their best, and the
winner emerges as the per-
son or group with the highest level of performance. A sales
contest between individuals
or teams is a competition; a confrontation between two members
of a sales force in which
one accuses the other of “stealing a sale” becomes a conflict
situation.
Conflict has been conceptualized as taking two forms.
Functional conflict serves the orga-
nization’s interests in some way. An example of functional
conflict would be one in which

improvement in performance or greater cooperation among
individuals or groups takes
place. Other terms used to describe functional conflict include
constructive, cooperative,
and substantive conflict (McGrath, 1984).
Dysfunctional conflicts include the destructive activities that
hinder group or organiza-
tional performance (Amason, 1996). Poor organizational
communication can create dys-
functional conflicts. Quality communication systems assist in
developing and resolving
functional conflicts, and aid in avoiding many conflicts.
Levels of Conflict
Many forms of conflict exist. Members of the business
community should be aware that
four levels of conflict occur in the workplace. Resolving
conflict cannot occur until the
level has been properly identified. The four levels of conflict
are:
For Review
Define conflict, functional conflict, and dysfunctional conflict.
baa66869_07_c07_223-258.indd 240 4/25/12 11:37 AM
Communication
1. between individuals
2. between groups or departments

3. between companies
4. with the government
Communication processes often accompany the various forms of
conflict. Table 7.9 lists
the communication venues that can become part of both
functional and dysfunctional
conflicts.
Table 7.9: Communication channels and conflict
Interpersonal Group Between Companies With the Government
Face-to-face verbal Meetings Advertising Meetings with
officials
Memos and letters Informal channels Media releases Media
releases
Telephone Social media Court documents Court documents
Email and text Email and memos Social media Social media
Social media Meetings with supervisors
Conflicts Between Individuals
Conflicts between individuals,
or interpersonal conflicts, take
place between employees both
on- and off-site. Personality con-
flicts often result from workplace
incivility and risky communica-
tion. Examples of incivility and
risky communication are: sexu-
ally inappropriate comments,
racial or ethnic slurs, ridicule of

older or younger workers, deri-
sion based on sexual orientation,
and insensitive comments about
physical or mental disabilities
(Blau & Anderson, 2005).
Workplace bullying is repeated,
health-harming mistreatment of
one or more persons. Bullying
For Review
What four levels of conflict take place in business settings?
Jupiterimages/Thinkstock
Workplace bullying is repeated, health-harming mistreatment
of one or more persons. Bullying involves one or more
perpetrators and takes the form of verbal abuse, offensive
conduct, and work interference.
baa66869_07_c07_223-258.indd 241 4/25/12 11:37 AM
Communication
involves one or more perpetrators and takes the form of verbal
abuse, offensive conduct,
and work interference (Workplace Bullying Institute, 2011).
Workplace bullying can create
another forum for conflict. Reyner & Hoel (1997) identify five
types of workplace bully-
ing, including the items in Table 7.10.
Bullying can happen at the same organizational rank (employee

to employee) or involve
hostility by a supervisor toward an employee. The tactics in
Table 7.10 lead to various
types of conflicts, some of which go unresolved, as the
individual is too intimidated to
react. Others lead to withdrawal behaviors, including increased
absenteeism and the
search for a different job.
Table 7.10: Types of workplace bullying
Threats to
professional status
Belittling opinion
Public professional humiliation
Accusation regarding lack of effort
Threats to personal
standing
Name-calling
Insults
Intimidation
Devaluation with regard to age
Isolation Preventing access to opportunities
Physical or social isolation
Withholding of information

Overwork Undue pressure
Impossible deadlines
Unnecessary disruptions
Destabilization Failure to give credit when due
Meaningless tasks
Removal of responsibility
Repeated reminders of blunders
Setting up to fail
Source: Rayner, C., & Hoel, H. (1997). A summary review of
literature relating to
workplace bullying. Journal of Community and Applied Social
Psychology, 7(1) 191–191.
Conflicts between individuals play out in many ways, as do the
bullying tactics in Table
7.10. Face-to-face confrontations are the most visible and
require the most direct, quick
action. Other interpersonal conflicts take place in the form of
email exchanges, comments
made in meetings, questions and arguments following
presentations, text messages, and
sometimes hostile memos and letters. Telephone skirmishes are
also common in com-
merce. More recently, postings on Facebook, in Twitter
accounts, and through other social
media indicate the presence of conflict. Remember that anything
you post electronically,

such as an email or text, is typically considered the property of
the company. As with any
baa66869_07_c07_223-258.indd 242 4/25/12 11:37 AM
Communication
message you put in writing, it can provide evidence of your
misbehavior, inappropriate
use of language, and other transgressions.
Groups and Departments
Intragroup conflict refers to incidents between members of one
group. Disagreements
about goals, methods of operation, and who will be the leader
create intragroup conflicts.
The end result can be poor decisions and ineffective group
functioning, when conflicts are
not properly managed and resolved (Bazerman & Neale, 1992).
Intragroup conflict takes
the forms of confrontations during meetings, between group
members in other locations
(face-to-face) and also by phone and email, and through social
media. Many times, infor-
mal communication or gossip becomes part of the conflict
process.
Intergroup conflict transpires between various groups or
departments. Besides conflicts
between departments within companies, other factions can
emerge around any common
point between employees (e.g., ethnicity, gender, position of
power, etc.) and this can

become the basis for various battles. Intergroup conflicts
emerge when disagreements
about goals, differences of opinion about which group should be
assigned a project or
task, or budget allocations become the focus of attention.
Intergroup conflicts may be
brought to the attention of management through memos and
emails, and by asking for
personal contacts with managers at high levels to present
grievances regarding the con-
duct of the other group or department.
Conflicts Between Companies
Numerous conflicts emerge between companies over proprietary
matters. Often, conflicts
involve advertising claims or other business tactics deemed
unfair or designed to compete
in unfair, illegal, or unethical ways. In those circumstances,
company leaders engage in
private negotiations, issue public statements and releases, and
request the intervention of
entities such as the Better Business Bureau and Federal Trade
Commission.
As an example of conflicts between organizations, the toy
company Mattel employed an
individual named Carter Bryant for many years. Bryant left the
company and became
part of MGA Entertainment, where he designed and developed
the popular Bratz line
of dolls to compete with Mattel’s Barbie brand. Mattel’s
executives claimed that Bryant
came up with the idea for the Bratz line while still employed at
Mattel. After intense con-
frontations, the matter went to court. Mattel won a $100 million
judgment against MGA

Entertainment; however, no punitive damages were assessed.
Both sides claimed victory
as a result (WCCO, 2010).
A wide range of additional conflicts are possible beyond
disputes over products. Compa-
nies may dispute rights to other properties, employment of rival
workers, theft of trade
For Review
Describe intragroup and intergroup conflict.
baa66869_07_c07_223-258.indd 243 4/25/12 11:37 AM
Communication
secrets, and clash over suppliers and retail outlets. The issues
and communication tactics
vary by the type of engagement involved.
Conflicts With the Government
Many companies engage in various types of conflict with
governmental officials and agen-
cies. Disagreements over regulations, taxes due, and meeting
various regulatory require-
ments can spur clashes with individuals from the government.
These include encounters
with local, state, and national officials, depending on the size
and scope of the company
and the issue involved. Also, some company managers in
international firms cope with
governmental officials from other countries.

Domestically, conflicts arise with representatives of the
Environmental Protection
Agency, Occupational Safety and Health Administration,
Internal Revenue Service, Food
and Drug Administration, and Federal Trade Commission.
Communication venues with
these individuals include for-
mal written reports, in-person
meetings, telephone conversa-
tions, email correspondence,
courtrooms, and formal media-
tion situations. An increasing
number of companies take dis-
putes with governmental orga-
nizations to the public through
public relations releases and
social media campaigns.
Each of these four types of con-
flict requires an intervention. In
the case of an intrapersonal con-
flict, a counselor or adviser may
assist. Intragroup and inter-
group conflicts may be resolved
in a variety of ways, most notably by the intervention of
managers. Conflicts between
companies and with the government often result in reliance on
attorneys to assist in reach-
ing an acceptable solution. Managers choose the most
appropriate method for dealing
with each problem as it arises.
Stages of Conflict
In 1967, Louis Pondy developed an often-used model of

conflict. A modified version
appears as Figure 7.1. Pondy’s model notes the presence of the
conflict cycle, in which
individuals or groups engage in a series of conflicts, even when
they are only spectators.
This causes them to become increasingly sensitized to the
events, which in turn makes
subsequent conflict more likely. After a series of conflicts has
been resolved, the company
enters a more tranquil period. During that time, individuals and
groups may become
more patient with each other, and the net result will be reduced
numbers of potential and
open conflicts. Managerial skill and intervention can break the
cycle of increasing conflict.
Conflicts between companies and with the government may
involve the use of formal mediation.
baa66869_07_c07_223-258.indd 244 4/25/12 11:37 AM
Communication
As shown in Figure 7.1, latent conflict represents all the
potential sources of conflict at the
individual or group level. These potential sources may or may
not erupt into open con-
frontations. Some problems may exist for years without ever
becoming manifest. Others
may take a “fast track” and quickly develop into altercations.
Table 7.11 lists the potential
sources of conflict within an organization. A lack of

communication or poor communication
can worsen latent conflicts. Misinterpreted messages often
heighten personality issues and
other disagreements. Posts on social media can also exacerbate
any latent sources of conflict.
Table 7.11: Sources of conflict
Individual Group or Departmental
Job assignments Group task assignments
Performance appraisals Budgets/resource allocation
Promotions Personalities of group members
Pay raises Dependence/bottlenecks
Personality issues and incivility Goals
Dependence/bottlenecks Communication breakdown
Goals Ethical issues
Status differences
Communication breakdown
Power differences
Ethical violations
Inappropriate use of social media
Sources: Thomas, K. W. (1994). Conflict and negotiation
processes in organizations, in Dunnette, M. D., & Hough, L. M.

(eds.) Handbook
of Industrial and Organizational Psychology, second edition,
Vol. 3. Palo Alto, CA: Consulting Psychologists. Jehn, K. A.
(1994). Enhancing
effectiveness: An investigation of advantages and disadvantages
of value-based intragroup conflict. International Journal of
Conflict
Management, 5(3) 223–238. Baack, D. (1998). Organizational
behavior. Houston, TX: Dame Publications, 406–408.
Aftermath
Resolution
Perceived
conflict
Latent
conflict
Felt
conflict
Open
conflict
Figure 7.1: An adaptation of Pondy’s conflict model
This adapted version of Pondy’s model shows the conflict cycle,
which starts with latent conflict or all the
potential sources of the conflict. The cycle continues with felt
and perceived conflicts. Then comes open
conflict, which is the confrontation resulting from escalation of
the issue. After open conflict, resolution
must take place. The aftermath of the conflict then cycles back
to latent conflict again.

Adapted from: L. R. Pondy (1967). Organizational Conflict:
Concepts and Models. Administrative Science Quarterly, 12
(September), 296–320.
baa66869_07_c07_223-258.indd 245 4/25/12 11:37 AM
CHAPTER 7Section 7.5 Conflict Resolution
Felt conflict occurs when people know something is wrong but
cannot pinpoint the source.
It is not unusual to have the experience of walking into a room
and feeling immediately
that something is wrong without knowing the actual problem.
That point is the felt con-
flict stage.
Perceived conflict means that those near a conflict know the
issues and the people involved,
yet do not feel discomfort from it. In essence, the conflict is
“someone else’s problem.”
Often perceived conflicts appear in other departments or parts
of the organization.
When two individuals or parties become engaged in a conflict,
perceptions play major
roles. Inaccurate perceptions of the other side’s position or of
the issue at hand lead to
inaccurate mutual perceptions in which resolution becomes
increasingly difficult (Hynes,
2011). In essence, as felt and perceived conflicts intensify,
perceptions become distorted.
The tendency shifts toward interpreting people and events as
either with one side or

against that side. Thinking reverts to more stereotypical and
biased forms that favor a
person’s viewpoint. This sets the stage for more-open conflict.
Open conflicts appear as showdowns, confrontations, and other
outward signs. Often an
open conflict results from ongoing escalation of the issue. As
this takes place, commu-
nication between the parties decreases, issues become blurred
by generalizations and
blanket statements, such as “You always . . .” or “You never . .
.” Parties to the conflict
lock into positions and tend to magnify differences and
minimize similarities between
the two sides.
Manifest conflict behaviors include yelling, loud arguments,
and violence toward others
at the individual level and work slowdowns, strikes, and
deliberate rules violations at the
group level. Evidence of conflict in meetings or presentational
formats can be revealed
through the questions audience or team members pose.
Controlling questions take the form
of mini-lectures in which one side of an argument or
disagreement seeks to dominate the
other. Hostile questions aggressively point out the conflict at
hand (Munter, 2012). Other
forms of manifest conflict are found in memos, emails, and
phone exchanges between the
parties. At that point, conflict resolution must take place. A
manager or arbiter will need
to step in.
7.5 Conflict Resolution

Learning Objective # 5: What methods are available to resolve
conflicts?
Conflict resolution includes an understanding of the concerns of
the parties. Both concerns about personal outcomes and
concerns about the other side’s outcomes affect the nature of
the conflict. Figure 7.2 lists the potential responses.
For Review
What are the stages of the conflict cycle?
baa66869_07_c07_223-258.indd 246 4/25/12 11:37 AM
When one side has little concern about the other’s outcomes,
two responses are contend-
ing and inaction. Contending or competing occurs when one
side fully pursues its out-
comes with no regard for the outcomes of the other side. Other
terms associated with
contending are dominating and forcing (Rahim, 1985). Forcing
expresses a high concern
for production with low concern for people (Hall, 1986). With
this approach, one sees
stronger tactics, such as threats, intimidation, and unilateral
action.
Inaction or avoiding is withdrawal or remaining passive during
the conflict. The passive
party has little regard for its own outcome and is not concerned
about the other’s out-
come. Some authors equate inaction or avoiding with a low

concern for people and a low
concern for production in the workplace (Blake & Mouton,
1970). In response, one side
retreats from the conflict.
A third response involves circumstances in which concerns for
the other’s outcomes are
high. Two possible actions are yielding and problem-solving.
Yielding or accommodating
involves seeking to help the other side achieve its outcomes
with little care about one’s
own outcomes. Yielding can also be termed obliging or
smoothing (Rahim, 1985). It occurs
when one party has a high concern for people and low concern
for production (Thomas
& Kilman, 1974).
Problem-solving or collaborating occurs when high concern for
the other’s outcomes
accompanies high concern for one’s own outcomes, and when
the parties share high con-
cerns for both people and production (Blake & Mouton, 1970).
The goal becomes a win-
win solution. Problem-solving has also been labeled as an
integrating approach.
When moderate levels of concern emerge for both personal
outcomes and the other side’s
outcomes, and concerns for people and production are also
moderate, the most common
approach involves compromising. A compromise becomes more
likely when consensus
cannot be reached, the goals of the two parties are not strongly
connected, and the two
sides hold equal levels of power.

Low concern for
other’s outcomes
High concern for
other’s outcomes
Moderate concern
for other’s outcomes
contending / competing
inaction / avoiding
yielding / accommodating
problem solving / collaborating
compromise
Figure 7.2: Responses to concerns
Both concerns about personal outcomes and the other side’s
outcomes affect the nature of the conflict
and subsequent responses.
baa66869_07_c07_223-258.indd 247 4/25/12 11:37 AM
Managers normally have the
responsibility of discovering the
relative positions of the two
sides to a conflict. In order to
resolve the conflict, manag-

ers try to identify the level of
give-and-take that will be pos-
sible by assessing the strength
of commitment each side has
to its position. More effective
negotiations or resolutions then
become possible. Then, the
venue and method for conflict
resolution can be chosen. Indi-
vidual meetings and group set-
tings can accommodate conflict
resolution.
The Steps of Conflict Resolution
A manifest conflict often requires a cooling-off period before
any attempt at resolution
can start. When emotions are high, reasonable dialog will be
unlikely. When an arbiter or
manager surmises that both sides have sufficiently calmed
down, conflict resolution can
commence. The steps of the conflict resolution process are:
1. Identify the parties involved.
2. Identify the issues.
3. Identify the positions of the parties.
4. Find the bargaining zone.
5. Make a decision.
Managers identify the parties by investigating whether a
conflict involves individuals or
groups. Identifying the issues takes time. Often a conflict
becomes manifest through an
unrelated issue. When two employees become involved in a
shoving match over a space
in the parking lot, the real conflict may be that one person was

passed over for a promo-
tion that was given to the person who “stole” his parking space.
When identifying the positions of the parties, a two-person or
two-group conflict should
have a fairly straightforward analysis. Many times, however, a
problem or concern exhib-
its many facets, and the net result will be that several people or
coalitions have some sort
For Review
What are the five main responses possible in conflict resolution,
based on levels of concern for others?
Eyecandy Images/Thinkstock
Conflict resolution is an important management communication
activity.
baa66869_07_c07_223-258.indd 248 4/25/12 11:37 AM
of vested interest. In that circumstance, the moderator tries to
determine the agendas of
each party.
The bargaining zone may be kept confidential, presented
openly, or can be deciphered by
a third party. In a conflict resolution, the bargaining zone
represents the settlement range
in a negotiation, or the boundaries of acceptable solutions for
both sides. It consists of the
area in which give-and-take can be carried out. At times, no

such range may be found; one
side will win and the other will lose. Table 7.12 suggests key
negotiation techniques when
seeking to resolve a disagreement.
Table 7.12: Negotiation techniques during conflict resolution
Focus on ideas and information rather than personalities
Find areas of agreement
Deal with important rather than trivial issues
Discuss potential tradeoffs
Identify objective criteria when assessing solutions
Find ways to move on following a resolution
Source: Andrews, D. C., & Andrews, W. D. (2004).
Management communication: A guide.
Boston, MA: Houghton Mifflin Company, 150–152.
Making the final decision determines the outcome of the
conflict. A win-win solution allows
all sides to make gains in the conflict resolution. Win-win
solutions can occur only when
four conditions have been met (Zand, 1972):
1. The parties believe cooperation will be better than conflict.
2. The parties trust each other.
3. Status differences between the parties have been minimized.
4. Mutually acceptable solutions can be found.
A win-lose solution means one side gains the advantage over the
other. A lose-lose, or com-

promise, means both parties gain on some issues but lose on
others (Rackham, 1976).
When the result of a conflict resolution has been well handled,
benefits may appear. Table
7.13 lists some of the positive outcomes associated with dealing
directly with conflict.
These occur at the interpersonal, intergroup, and intragroup
levels.
baa66869_07_c07_223-258.indd 249 4/25/12 11:37 AM
Table 7.13: Benefits of dealing directly with conflict
Individual
Stronger relationships with co-workers
Increased self-respect for taking action
Personal growth and development in understanding how you
responded
Organizational
Increased efficiency and effectiveness following effective
resolution
Spurs creativity
Allows for synergy and teamwork among employees

Source: O’Rourke, J. S. IV (2010). Management
communication: A case-analysis approach
(4th ed.). Upper Saddle River, NJ: Prentice Hall.
Conflict Outcomes
The goal of any conflict resolution should be to reach a
functional settlement. Three desired
outcomes of conflict resolution are (1) agreement, (2) stronger
relationships, and (3) orga-
nizational learning. Agreement has been achieved when both
sides believe a settlement
was fair or equitable. Stronger relationships emerge when both
parties try to build trust
and goodwill for the future. Organizational learning takes place
when an individual or
group achieves greater self-awareness and/or better understands
how to find creative
solutions to problems. While desirable, these goals will be
difficult to achieve. Many times,
the negative aftereffects of conflict, as listed in Table 7.14,
become the result.
Table 7.14: Potential negative aftereffects of conflicts
Anger, revenge, continuing attempts to make the other side look
bad
Noncompliance with orders and decisions
Reduced effort/passive resistance
Empire building, withholding information, territory defense
Increasingly legalistic approach to tasks and assignments

Withdrawal behaviors such as daydreaming or meeting in
groups to visit
New lobbying efforts
Sarcasm in front of the mediator
Increased sensitivity to statements and comments
For Review
What are the steps of conflict resolution?
baa66869_07_c07_223-258.indd 250 4/25/12 11:37 AM
CHAPTER 7Section 7.6 Chapter Review
Effective management of conflict includes two primary
activities. The first involves man-
agers actively analyzing potential sources of conflict at all
times. Then reducing, modi-
fying, or removing the source can be accomplished. Second,
managers should seek to
become adept conflict arbiters. Remember that impartiality, a
sense of humor, and a calm
disposition are major assets in conflict resolution.
7.6 Chapter Review
Negotiation is a give-and-take decision-making process
involving interdependent parties with differing objectives or
outcome preferences. Distributive negotiations involve a single
issue and a zero-sum game in which one side’s gains becomes
the

other side’s losses (win-lose). Integrative negotiation resembles
a problem-solving agenda
in which two or more sides try to obtain a settlement that
benefits all sides. Negotiations
take place between individuals and companies, between
companies, and when compa-
nies bargain with outside groups such as unions, the
government, or special interests.
Prior to entering a negotiation, managers should believe it
represents the best option. By
studying the bargaining environment, the availability of
bargaining resources, and the
characteristics of the bargaining issue, the preconditions to
negotiation can be met.
The three stages of negotiation are the preliminary, bargaining,
and ending phases. In the
preliminary stage, the maximum supportable outcome and
lowest supportable outcome
define the settlement range or bargaining zone. This zone for
each side can be kept confi-
dential or shared openly across the bargaining table. BATNA
represents the best accept-
able alternative to a negotiated agreement, which specifies the
lowest acceptable value to
a party as a substitute to a stalemate. Bargaining consists of
framing, discovery, consen-
sus, and packaging. The ending stage includes the close and
efforts to sustain a future
relationship.
Conflict is a circumstance in which one party negatively affects
or seeks to negatively
affect another party in both observable and perceived ways.
Functional conflict occurs

when the organization’s interests are served in some way.
Dysfunctional conflict includes
the destructive activities that hinder group or organizational
performance. Conflicts occur
between individuals, between groups or departments, with other
companies, and with
the government. The stages of conflict are latent, perceived,
felt, and open phases.
Responses to conflict are determined by the level of concern for
others versus concern for
one’s own side. Responses include contending/competing,
inaction/avoiding, yielding/
accommodating, problem-solving/collaborating, and
compromise. The steps of conflict
resolution begin with identifying the parties involved. Then, a
manager or someone who
For Review
What benefits are associated with dealing directly with a
conflict?
What negative effects can accompany a conflict resolution?
baa66869_07_c07_223-258.indd 251 4/25/12 11:37 AM
intervenes identifies the issues, the positions of the parties, and
attempts to discover the
bargaining zone. Finally, a decision will be reached, including
win-win, win-lose, and
lose-lose options. Conflicts offer both potential benefits and

problems, depending on how
they arise and how they are settled.
Key Terms
BATNA The best alternative to a negotiated
agreement that identifies the lowest accept-
able value to a party as a substitute to a
stalemate.
conflict A circumstance in which one party
negatively affects or seeks to negatively affect
another party in both observable and per-
ceived ways.
distributive negotiations A negotiation involv-
ing a single issue and a zero-sum game in
which one side’s gains become the other side’s
losses (win-lose).
dysfunctional conflicts Conflicts that include
the destructive activities that hinder group or
organizational performance.
functional conflict Conflict that occurs when
the organization’s interests are served in
some way, such as improvement in perfor-
mance or greater cooperation among indi-
viduals or groups; also called constructive or
cooperative conflict.
integrative negotiation A problem-solving
negotiation agenda in which both sides try to
obtain a settlement that benefits both, or a
win-win solution.

intergroup conflict Conflicts that take place
between various groups or department over
matters such as disagreements about goals,
differences of opinion about which group
should be assigned a project or task, or budget
allocations.
intragroup conflict Incidents between mem-
bers of a group, including disagreements about
goals, methods of operation, and who will be
the leader.
lowest supportable outcome The least
amount or least favorable position a side will
accept from a negotiation.
maximum supportable outcome The absolute
most a side can ask for as an opening position,
within reason.
negotiation A give-and-take decision-making
process involving interdependent parties with
differing objectives or outcome preferences.
stakeholder group A group of people with a
vested interest in the outcome of a negotiation.
workplace bullying Repeated, health-harming
mistreatment of one or more persons by one
or more perpetrators that takes the form of
verbal abuse, offensive conduct, and work
interference.
baa66869_07_c07_223-258.indd 252 4/25/12 11:37 AM

For Review With Possible Responses
1. Define negotiation, distributive negotiation, and integrative
negotiation.
Negotiation is a give-and-take decision-making process
involving interdependent parties
with differing objectives or outcome preferences. When a single
issue is involved, and a
zero-sum game exists in which one’s side gain or advantage
becomes the other side’s loss
or disadvantage, it is a distributive negotiation. An integrative
negotiation is a problem-
solving agenda in which two or more sides try to obtain a
settlement that benefits both.
2. What three types of negotiations take place in the business
community?
Individual with company, company with company, company
with other organization.
3. What three preconditions to negotiations should be examined
to see if bargaining
should take place?
Three preconditions are understanding the bargaining
environment, the availability of
bargaining resources, and the characteristics of the bargaining
issue.
4. What are the three main stages of the negotiation process?
The preliminary stage, the bargaining stage, and the ending
stage.
5. Define maximum supportable outcome, lowest supportable

outcome, and BATNA.
The maximum supportable outcome is the absolute most a side
can ask for as an opening
position, within reason. The lowest supportable outcome
constitutes the least amount or
least favorable position a side will accept from a negotiation.
BATNA, or best alternative
to a negotiated agreement, identifies the lowest acceptable value
to a party as a substitute
to a stalemate.
6. Briefly describe the two activities that take place in the
preliminary stage of
negotiation.
In the preliminary stage, two primary activities receive
attention: preparation and open-
ing. During preparation, managers identify and evaluate the
receiver, sender, and pur-
pose of the negotiation. The opening begins when parties make
initial contact in person,
by telephone, by mail, or online. In this stage, negotiators seek
to build rapport and try to
establish a cordial relationship.
7. What four processes take place during the bargaining stage
of a negotiation?
The bargaining stage includes the processes of framing,
discovery, consensus, and
packaging.
8. What two activities are involved in the ending stage of the
negotiation process?
Two elements of the ending stage are the close and the follow-
up.
9. Define conflict, functional conflict, and dysfunctional

conflict.
Conflict is a circumstance in which one party negatively affects
or seeks to negatively
affect another party in both observable and perceived ways.
Functional conflict serves
the organization’s interests in some way. Dysfunctional
conflicts include the destructive
activities that hinder group or organizational performance
10. What four levels of conflict take place in business settings?
The four levels of conflict are those between individuals,
between groups or departments,
between companies, and with the government. Intergroup
conflict transpires between
various groups or departments.
11. Describe intragroup and intergroup conflict.
Intragroup conflict refers to incidents between members of one
group. Intergroup conflict
transpires between various groups or departments.
12. What are the stages of the conflict cycle?
Latent conflict, perceived and/or felt conflict, open conflict,
conflict resolution, and con-
flict aftermath.
baa66869_07_c07_223-258.indd 253 4/25/12 11:37 AM
13. What are the five main responses possible in a conflict
resolution, based on levels
of concern for others?
Contending/competing, inaction/avoiding,

yielding/accommodating, problem solving/col-
laborating, and compromise.
14. What are the steps of conflict resolution?
The steps of the conflict resolution process are: Identify the
parties involved. Identify the
issues. Identify the positions of the parties. Find the bargaining
zone. Make a decision.
15. What benefits are associated with dealing directly with
conflict?
For individuals, there can be stronger relationships with co-
workers, increased self-
respect for taking action, and personal growth and development
in understanding how
you responded. For organizations, there can be increased
efficiency and effectiveness
following effective resolution, as well as greater creativity, and
it allows for synergy and
teamwork among employees.
16. What negative effects can accompany a conflict resolution?
The potential negative aftereffects include: anger, revenge,
continuing attempts to make
the other side look bad, noncompliance with orders and
decisions, reduced effort/passive
resistance, empire-building, withholding information, territory
defense, an increasingly
legalistic approach to tasks and assignments, withdrawal
behaviors such as daydreaming
or meeting in groups to visit, new lobbying efforts, sarcasm in
front of the mediator, and
increased sensitivity to statements and comments.
Analytical Exercises

1. The past several chapters have examined channel richness in
terms of vari-
ous media, including face-to-face interactions, telephone
conversations, emails,
teleconferencing, letters, memos, reports, and presentations.
Discuss the role and
importance of channel richness in negotiations in these
circumstances:
a. Individual bargaining for wages and working conditions
b. Airline companies seeking to form an international
partnership
c. Union-management bargaining
2. Describe the potential for conflict and the types of conflict
that might be expected
to emerge in the following negotiations. Then explain the most
likely channels of
a. communication to be used in each circumstance.
b. individual bargaining for wages
c. sales call—company to company
d. company leaders with union
e. company leaders with the government
f. company leaders with leaders of a special-interest group
3. The five sources of influence in negotiations include
legitimate, reward, coercive,
expertise, and charisma. Explain how these would be present for
both sides of a
negotiation in the following bargaining circumstances. Then
explain which chan-
nels of communication should be used in the negotiation.
a. successful CEO negotiating to become CEO of a different
company
b. Intel negotiating to sell its processors to a new computer
company
c. United Auto Workers negotiating with General Motors, which

is seeking to
reduce pay and benefits to stay in business
d. Major financial institution bargaining with the United States
government for
a loan to maintain operations
baa66869_07_c07_223-258.indd 254 4/25/12 11:37 AM
CHAPTER 7Section 7.7 Case Studies
4. Make a chart that explains the potential for conflict, the type
of conflict to be
expected, and the channels of communication that should be
used in the follow-
ing stages of negotiation:
Preliminary Stage Bargaining Stage Ending Stage
Prepare Framing Close
Open Discovery Follow-up
Consensus
Packaging
5. At times, a conflict stands a better chance of effective
resolution when a third
party intervenes. Alternative dispute resolution attempts to
incorporate more
user-friendly methods of dispute resolution, seeking to avoid
adversarial

approaches. The methods used in this approach include
facilitation, concilia-
tion, peer review, ombudsman, mediation, and arbitration.
Facilitation involves
a third party urging the two sides to meet and to deal directly in
a constructive,
positive fashion. Conciliation uses a neutral third party who
acts informally as
a communication conduit to help resolve a dispute without
directly meeting.
Peer review asks a panel of trustworthy co-workers who can
remain objective
to render a nonbinding verdict or opinion about how the conflict
should be
resolved. An ombudsman will be a respected employee who will
hear both sides
of an argument and attempt to arrange a solution that is
acceptable to both sides.
Mediation employs a trained arbiter to find innovative solutions
to the conflict.
Arbitration retains a third party who will operate in a formal,
court-like environ-
ment and will hear testimony and evidence before rendering a
judgment about
how the conflict should be resolved. Describe three
circumstances in which these
options would be better than a manager stepping in to resolve a
conflict.
7.7 Case Studies
Case Study 1: Cutting the Best Deal
Jennifer Swann faced one of the bigger decisions in her young
life. She graduated college with a
degree in physiology but changed course and became a massage

therapist instead. She built a solid
clientele list while working in a local beauty salon, HairPros.
She paid a monthly rental fee for booth
space and in exchange for some telephone support in terms of
employees taking messages. More
important, the salon sold gift certificates on her behalf, which
greatly increased her business, espe-
cially during the holidays.
Tragically, a fire destroyed the HairPros facility. After careful
consideration, its owner, Bruce Penske,
decided to relocate to a more upscale part of the city rather than
to rebuild on the current lot. As part
of the moving process, Bruce also felt it was time to renegotiate
his agreement with Jennifer.
Meanwhile, Jennifer had taken the initiative to rent a separate
space during the initial period in which
HairPros was closed. She informed her clients that they could
receive massage at the (continued)
baa66869_07_c07_223-258.indd 255 4/25/12 11:37 AM
same rate in her temporary location, which helped maintain her
income. She no longer had the advan-
tage of phone service, but had mostly relied on her own cell
phone to make appointments for the
past year. She was concerned about losing gift-certificate
business. At the same time, the rental for
her temporary office was lower than the amount Bruce had
charged, and she was able to set her own
hours. She did not tell Bruce about her temporary office for the

first three weeks following the fire.
After a month had passed and HairPros was about to resume
operations, Bruce offered Jennifer a new
agreement. He asked her to raise her rates for all her services.
In exchange, he was willing to lower her
rental fee and pay her a small amount to supervise that part of
his business. He notified Jennifer of his
plans to hire a second therapist, as the new facility would have
two rooms. The new therapist would
charge a lower rate per session. Jennifer would have first choice
of rooms.
Jennifer worried that most new business, including the part that
came from gift-certificate sales,
would go to the second therapist. She also wondered if the
modest increase in her rates would affect
her regular customers. At the same time, she worried that
“going solo” by staying in her temporary
location and cutting ties with HairPros would be a risky move.
She would no longer have referrals from
hairstylists in the same location, several of whom were her
clients.
Review Questions
1. What are the bargaining issues in this scenario?
2. What channels of communication should Bruce and Jennifer
use while negotiating their new
arrangement?
3. What would define the settlement zone in this situation?
4. What should Jennifer do? Defend your answer.
Case Study 2: Meet the New Boss

Winston’s Cleaning Service had enjoyed a long run as the
premier clean-up company in the greater
Cincinnati area. Myron Winston founded the company three
decades earlier and built the business
through careful attention to customer and employee needs. He
was well known for giving unsched-
uled bonuses when he believed an employee or team had gone
above and beyond to keep a cli-
ent happy. The local Chamber of Commerce had recognized
Winston for building the city’s “Most
Respected Minority-Owned Company.”
Winston’s Cleaning Service served a variety of local firms.
Shifts began at 6 p.m. as crews would head
to office buildings, banks, and other facilities that closed earlier
in the day. Shifts ended at 2:00 a.m.
Employees worked five days per week, with either Saturday or
Sunday off, along with one weekday.
They received a week of paid vacation after one year of service,
two weeks per year for two to five
years on the job, and three weeks per year for any time after
five years. Wages were slightly above
prevailing local rates for comparable work.
When Myron Winston retired, his son Tyler Winston took over
the role of top manager. Unfortunately,
after only three years in the role, he was forced to step down
because of health problems. He did retain
ownership of the company. The new company manager was
promoted from the ranks. Billy Branton
was known for his willingness to tackle the most repugnant
tasks, including sewage spills and other
nasty assignments. He was always the first to arrive and the last
to leave for a shift.
It did not take long for Branton to make his mark. He began

assigning workers to come in for five con-
secutive days, even when this meant the worker had to be on the
job over the weekend.
Case Study 1: Cutting the Best Deal (continued)
(continued)
baa66869_07_c07_223-258.indd 256 4/25/12 11:37 AM
He also tended to be harsh and critical about poor performance,
rather than excited and supportive
for superior work. It did not take long for employee grumbling
to grow.
A group of employees contacted Tyler Winston about the
situation. They expressed concern that
Branton was gradually changing the culture of the company.
They carefully noted that Branton did not
seem to value their efforts in the same way that Tyler and
Myron Winston had over the years. Tyler
promised to visit with Branton to discuss the issues.
Two weeks later, however, the situation reached a boiling point.
Branton announced that there would
be no further raises until companywide performance improved.
He stated that there was too much
malingering at various sites, making jobs take too long. Then,
Branton notified employees that he had
scheduled shifts for Thanksgiving night, Christmas Eve and
Christmas night, as well as New Year’s Eve
and New Year’s night, because he had contacted organizations

and companies that wanted clean-up
services on those occasions. The Winston family had always
made sure that all employees had each of
those evenings free, along with other holidays such as
Hanukkah, Easter, Passover, Memorial Day, the
Fourth of July, Labor Day and even President’s Day.
Branton sniffed when asked about those working additional
holidays. “What are you complaining
about? You make time and a half,” he told a group of
employees.
“What if we would rather have time with our families?” asked
one brave employee.
“You know, in this economy, I just can’t imagine it would be
too hard to replace someone,” came the
reply.
“You know,” the employee responded, “I have friends that are
Teamsters. They have been talking
about paying this company a visit. Maybe they could get us
organized.”
“Bring it on,” Branton replied.
The next day, another group of employees approached Tyler
Winston. They really did not want to go
through the unionization process, if it wasn’t necessary. Mainly,
they just wanted the same treatment
that they had always received.
Review Questions
1. What form of latent conflict is present in this situation?
2. Did this conflict become felt or perceived, or just move

directly into open conflict? Explain your
analysis.
3. What steps should Tyler Winston take to resolve the conflict?
4. Is a functional conflict possible in this situation? Defend
your answer.
5. What should Tyler Winston do about Billy Branton?
Case Study 2: Meet the New Boss (continued)
baa66869_07_c07_223-258.indd 257 4/25/12 11:37 AM
baa66869_07_c07_223-258.indd 258 4/25/12 11:37 AM
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8
Learning Objectives
After reading this chapter and studying the materials, you
should be able to:
1. Describe what constitutes ethical management
communication.
2. Identify the major ethical dilemmas in management
communication.
3. Communicate clear, transparent, accurate messages and
respond effectively to unethical tactics.
4. Improve your ethical reasoning processes when
communicating.
Ethical Management
Communication
baa66869_08_c08_259-286.indd 259 4/25/12 11:39 AM
CHAPTER 8Section 8.1 Understanding Ethics
8.1 Understanding Ethics
Learning Objective # 1: What constitutes ethical management
communication?
Ethics, also known as moral philosophy, is a branch of thought
that addresses ques-tions about morality and deals with
concepts such as right and wrong, virtue and vice, and justice
and crime (Rae, 2009, p. 15). Ethical challenges have been part
of the

world of business for as long as there has been a business
world.
Recent dramatic stories involving Enron, BP, Arthur Andersen,
and other corporate
giants, as well as several banking chains involved in the 2008
mortgage crisis, have re-
ignited interest in building a more ethical business climate.
Enron engaged in manipula-
tion of energy prices and illegal accounting practices. Arthur
Andersen was complicit
by failing to identify the illegal accounting practices as part of
audits of company books.
BP failed to follow safety protocols and record keeping, which
led to the 2010 Gulf oil
spill disaster.
Communication systems inevitably play into a fraud or
unethical action taken by a cor-
poration, manager, or employee. Ethical decisions are made not
only by corporate lead-
ers, but also by every member of an organization. As recent
headlines have been packed
with ethical issues, colleges and universities teaching the
business leaders of tomorrow
have enhanced training and awareness of ethical decision-
making. One perspective, ethi-
cal management, favors training for individuals preparing to
enter the world of business
(Waite, 2011). We will focus on this approach in this chapter by
examining the nature of
ethical and unethical communication and by offering analytical
models and reasoning
processes associated with moral dilemmas and ethical choices.
Values form the building blocks of an ethical system (Rae,

2009). Individual and collec-
tive values vary, of course, because they are influenced by
numerous forces, including
religion, national origin, upbringing, and social associations.
This means that the dis-
tinction between right and wrong can be debatable or
controversial. For example, charg-
ing interest is considered wrong in some cultures, while most of
you reading this have
come to expect to pay interest on certain purchases, such as
your tuition or the purchase
of a house.
An ethical system that determines what is good or bad, right or
wrong, and appropriate or
inappropriate leads to a code of behavior based on those
principles. The belief that steal-
ing, theft, or obtaining money through a less-than-transparent
business practice is wrong
leads to a code of behavior in which it would be objectionable
to take money from inno-
cent people through “legal,” if not ethical, business practices.
Such a choice might cause
a person not to conduct business with a company dealing in
payday or car-title loans, or
with similar lending institutions. Business ethics are standards
and guidelines regarding
the conduct of commerce and the development of relationships
in business (Ferrell, Frae-
drich, & Ferrell, 2011).
Ethical communication consists of passing information along in
a manner that is truthful,
does not violate the rights of others, and does not aim to
deceive (Kolin, 2001). This chap-
ter explores the value of ethical communication in the context

of business management.
Unethical communication, on the other hand, violates the
principles of truthful commu-
nication and can hurt others. Examples of unethical
communication appear in Table 8.1.
baa66869_08_c08_259-286.indd 260 4/25/12 11:39 AM
Table 8.1: Selected examples of unethical communication
Theft of intellectual property, including patents, copyrights,
trade secrets, Internet domain names
Misleading by omitting essential information
Selective misquotation
Distorting statistics and facts
Violating privacy of others
Sources: Cheeseman, H. R. (2003). Contemporary business and
e-commerce (4th ed.). Upper Saddle River, NJ: Prentice Hall.
Kolin, P. C.
(2001). Successful writing at work (6th ed.). Boston, MA:
Houghton Mifflin.
For Review
Define ethics, business ethics, and ethical communication.
The 2008 Mortgage Crisis and the Failure of Management

Communication
In early 2012, Bank of America, Wells Fargo, JP Morgan Chase,
Citi-
group, and Ally Financial paid a $25 billion settlement for
foreclo-
sure abuses. The payments were designed to assist those
consum-
ers who had been injured by unethical practices in the banking
and
mortgage industries (Associated Press, 2012).
Three entities contributed to the financial disaster that resulted
from the 2008 mortgage crisis—consumers, financial
institutions,
and governmental agencies. Many consumers applied for and
received mortgages that they simply could not afford. Enticed
by
100 percent financing offers and other high-risk instruments
(sub-
prime mortgages), many consumers purchased homes at prices
that were far beyond their means. In addition, governmental
offi-
cials failed to recognize a trend in which far too many of these
high-risk mortgages were being granted (including those made
by
quasi-governmental lenders Fannie Mae and Freddie Mac) and
that those instruments were being packaged and bundled to sell
in
the securities markets, where they eventually failed. Many
finan-
cial lending institutions contributed mightily to what took
place.
These lenders often failed to adequately explain the terms of
mort-

gages to customers, whether by deliberate deception or mere
exu-
berance. A great deal of paperwork was either never filled out,
was partially completed, or was simply ignored, regarding a
consumer’s ability to make payments on
homes with potentially artificially high prices. Consequently, a
large number of high-risk loans were
written (Wilson, 2010).
Internal management communication failed to notify those
creating mortgages that a problem
existed. It may have been top financial officers who knew of the
problem and failed to report it inter-
nally, or that internal communications were intentionally
deceptive. In either case, the loans placed
many of these institutions at risk, and eventually government
bailouts of these banks became the only
remedy that would forestall a worsening recession in the U.S.
economy. (continued)
Ingram Publishing/Thinkstock
Many financial lending
institutions contributed
significantly to the 2008
economic crisis in the
United States.
baa66869_08_c08_259-286.indd 261 4/25/12 11:39 AM
Ethical Approaches to Management Communication
Individuals, cities, and countries develop laws and regulations

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